Maintenance spending increasing

SPENDING on maintaining rail and port infrastructure around the nation is outstripped the amount spent on keeping roads, telecommunications and defence up to date, a report out today reveals.

A review of the maintenance industry by market research firm BIS Shrapnel, reveals that spending on maintenance has increased in the past two years, but not enough to keep up with demand.

The report highlights how much the nation needs to spend on maintenance to avoid huge blow-outs in reconstruction costs.

While the amount spent on mining infrastructure such as ports and railways was strong, roads and telecommunications and light manufacturing had the weakest outlooks.

Report author Adrian Hart, of BIS Shrapnel's infrastructure and mining unit, said there was only $1.44 being spent on every $100 worth of Australian infrastructure assets, down from $1.70 last decade.

Overall, the report forecasts that real maintenance spending will rise 2.2% each year on average to 2016-17, to $39 billion.

However, this contrasts poorly with Australia's net capital stock, which has grown around 50% in the past decade and was rising strongly.

Mr Hart said the low levels in maintenance funding, particularly for community assets like roads, needed to be reviewed.

"While private asset owners can dedicate funds as needed to serve their business interest, the community has no such avenue for controlling the maintenance applied to public assets," he said.

"In our view, this has seen many years of underspending in maintenance on roads, public rail, utilities and defence assets.

"Governments should be prepared to keep investing in infrastructure to boost productivity, but these investments should be accompanied with a commitment to maintain assets sensibly for maximum benefit over the long term."